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Perception of poverty. Individual, household and social enviromental determinants

  • Isabella Santini

    ()

    (Department of Methods and Models for Economics, Territory and Finance MEMOTEF, Sapienza University of Rome (Italy))

People’s perception of their own well-being depends on, among other factors, the household level of income and wealth, the respondent’s socio-economic characteristics (sex, age, employment status, etc..) and social capital endowment of household place of residence (Sen A., 1985, The Standard of Living. The Tanner Lectures, Cambridge University Press, Cambridge). However, limited attention has been dedicated to understanding to what extent people’s perception of their own well-being is influenced by social capital endowment of household place of residence. Interest in this type of problem arises from the need to highlight to what extent subjective perception of well-being depends on individual and family socio-economic conditions and to what extent it depends on the characteristics of the local context of where the family lives. Such evidence would help the central and local authorities and economic operators to choose the appropriate socio-economic measures in order to improve household living conditions. Hence, this research aims to answer the following questions: i) To what extent subjective well-being is affected by respondent's socio-economic characteristics, by household economic conditions and by social capital endowment of household place of residence? ii) Which of the social capital components (Social Behaviour, Social Relationships, Social Engagement, Civic Responsibility, Territorial Characteristics) has a higher impact on subjective well-being and can be regarded as primary risk factor of family poverty status? In order to purse this aim , the ordered probit model will be used to analyse answers to the following question taken from the Survey on Household Income and Wealth (SHIW) of the Bank of Italy Considering your monthly disposable income, is your household able to make ends meet: (1) with great difficulty, (2) with difficulty, (3) with some difficulty, (4) without difficulty, (5) with ease, (6) with great ease? The explanatory variables x are grouped as following: 1. Respondent’s socio-economic characteristics; 2. Household socio-economic characteristics; 3. Social capital endowment of household place of residence. and we adopt the definition of social capital suggested by the World Bank Social Capital Initiative research group “The social capital […] includes the institutions, the relationships, the attitudes and values that govern interactions among people and contribute to economic and social development “ . ( See Grootaert, C. and van Bastelaer, T., 2002, Social capital from definition to measurement, in Grootaert, C. and van Bastelaer, T. (Eds.): Understanding and Measuring Social Capital. A Multidisciplinary Tool for Practitioners, The World Bank, Washington DC. and for measurement issues Santini I., 2008, Social capital and its impact on the production process, Int. J. Management and Decision Making, Vol. 9, n.5.) The model will be applied to the 2006 Survey on Household Income and Wealth (SHIW) of the Bank of Italy. The same model will be applied to previous Surveys on Household Income and Wealth (SHIW) of the Bank of Italy in order to highlight possible changes in the determinants of subjective well-being.

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File URL: http://www.memotef.uniroma1.it/sites/dipartimento/files/wpapers/documenti/Isabella_Santini_WP72.pdf
File Function: August 2010
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Paper provided by Sapienza University of Rome, Metodi e modelli per l'economia, il territorio e la finanza MEMOTEF in its series Working Papers with number 72/10.

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Handle: RePEc:rsq:wpaper:1/10
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  1. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July.
  2. Christian Bjørnskov & Axel Dreher & Justina Fischer, 2008. "Cross-country determinants of life satisfaction: exploring different determinants across groups in society," Social Choice and Welfare, Springer, vol. 30(1), pages 119-173, January.
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